Update: FINRA Board of Governors September Meeting

The FINRA Board of Governors met September 17-18 in New York. It was the first meeting for its two newly elected industry Governors: new Large Firm Governor J. Bradford Eichler, chief operating officer at Stephens Inc., and new Small Firm Governor Erin Baskett, chief executive officer of Sine Qua Non Capital LLC.

The Board received a progress update on the FINRA Forward initiatives to improve FINRA’s effectiveness and efficiency in pursuing our mission. As part of the initiative to modernize FINRA’s rules, the Board approved amendments that will replace the day trading and pattern day trading rules, including the minimum equity of $25,000 for pattern day traders, with an intraday margin rule that applies the existing maintenance margin rules to intraday exposure. Last fall FINRA initiated a retrospective review to assess whether the rules needed to be adapted for today’s technological and trading environment. The proposal incorporates feedback we received from member firms, industry groups, and investors from the Regulatory Notice launching the retrospective review. The amendments will be filed with the SEC for approval. 

The Board also discussed a forthcoming Regulatory Notice that will reduce unnecessary burdens and consolidate prior guidance regarding the use of negative consent for the bulk transfer or assignment of customer accounts.

The Board also:

  • received an update on recent developments regarding the Consolidated Audit Trail;
  • received an update on FINRA’s cybersecurity program designed to mitigate cybersecurity risks and ensure compliance with applicable legal requirements; and
  • reaffirmed FINRA’s Financial Guiding Principles, an integral part of our commitment to financial transparency.

The next FINRA Board meeting is scheduled for December. More information about the Board’s operations, including membership and responsibilities of its committees, is available here. 

Before I close, I would like to remind member firms that the nomination deadline for the upcoming Small Firm Advisory Committee and Regional Committee elections is October 6. As a self-regulatory organization, FINRA is committed to deep engagement with its member firms, and these committees play an important part in informing FINRA’s regulatory programs. 

Finally, I look forward to seeing many of you at the annual Small Firm Conference in Dallas on Oct. 9 and 10. 

Sincerely,

Robert W. Cook
CEO